HomeMy WebLinkAbout20A - DOWNTOWN SA BID
CITY COUNCIL MEETING DATE:
REQUEST FOR
COUNCIL ACTION
CLERK OF COUNCIL USE ONLY:
APRIL 7, 2008
TITLE:
cY
REPORT tJAIZ
CITY MANAGER
APPROVED
o As Recommended
o As Amended
o Ordinance on 151 Reading
o Ordinance on 2nd Reading
o Implementing Resolution
D Set Public Hearing For
APPROPRIATION ADJUSTMENT -
DOWNTOWN SANTA ANA BUSINESS
IMPROVEMENT DISTRICT 2008 ANNUAL
CONTINUED TO
FILE NUMBER
RECOMMENDED ACTION
1. Approve the 2008 annual report.
2 .
Approve an appropriation
Downtown Santa Ana Business
to reimburse funds 407 and
and utility costs.
adjustment to allocate funds to the
Improvement District budget for 2008 and
27 for the holiday lighting decorations
3. Authorize the City Manager and Clerk of the Council to execute the
attached agreement in the amount of $136,000 for a one-year term,
subject to non substantive changes approved by the City Manager and
City Attorney.
COMMUNITY REDEVELOPMENT AND HOUSING COMMISSION ACTION
At its Special Meeting of March 11, 2008, by a vote of 4 -0 (Villasenor
absent), the Community Redevelopment and Housing Commission approved the
2008 annual report, directed the Deputy City Manager for Development
Services to file the Downtown Santa Ana Business Improvement District
2008 annual report with the Clerk for City Council approval or
modification, and recommended that the City Council approve the 2008
annual report.
DISCUSSION
On February 6, 1984, the City Council adopted Ordinance No. NS-1715
pursuant to Section 36500 et seq of the California Streets and Highways
Code, creating a Business Improvement District (BID) in Downtown Santa
Ana. The BID allows the businesses to assess themselves in order to
raise funds for the promotion and improvement of the Downtown area. The
enabling statute calls for an advisory board to make recommendations to
20A-1
BID 2008 Annual Report
April 7, 2008
Page 2
the City Council on the expenditure of revenue derived from assessments,
the classification of businesses, and the method and basis of levying
assessments. The advisory board also has an annual report prepared which
it files with the Clerk. The report includes the name and boundaries of
the BID, the activities and their cost proposed for the coming year, the
method and basis of levying and collecting the assessments, and basic
financial information covering such things as prior year surplus or
deficits and non assessment revenue.
The critical factor behind the success of BIDS is that district
stakeholders control and manage their own programs and budget. In nearly
every BID in California, district stakeholders those businesses
actually paying into the district - are designated as the advisory board.
Until October 2003, the Downtown Santa Ana Business Association (DSABA)
fulfilled that role. When DSABA wound down its affairs as an active
stakeholder group representing the greater Downtown in general, and the
BID in particular, the Council appointed the Community Redevelopment and
Housing Commission (CRHC) as advisory board to fill the void.
Wi th respect to the actual programming and acti vi ties that had been
implemented by DSABA, two new groups emerged: Downtown Santa Ana
Business Council (DSABC) and La Calle Cuatro de Santa Ana (LACCSA), to
develop programs and manage the BID funds by way of contract with the
Ci ty. These two groups shared the assessment funds according to an
agreed-upon formula.
On December 13, 2006, the CHRC sent a report and recommendation to the
City Council; and on February 5, 2007, the City Council adopted the 2007
budget for the BID in Downtown. The budget specifically called for
$9,900 to be allocated toward Downtown's winter holiday decorations,
while the remainder ($219,200) was generally designated for promotions
and marketing, with the anticipation that a more detailed work plan would
be submitted by stakeholders. No such work plan was submitted; and
therefore, the assessments collected in 2007 were not spent.
The 2008 work plan and budget has been developed by Downtown stakeholders
wi th the assistance of staff. It calls for 1) programs of general
benefit to the greater Downtown, 2) programs targeted to benefit
businesses usually considered to be represented by the DSABC, and 3)
programs targeted to benefit businesses along and adjacent to 4th Street
that were formerly represented by LACCSA and which can generally be
categorized as appealing predominantly to a Spanish-speaking market
sector.
The City will retain fiduciary oversight of the programs intended to be
of general benefit to the Greater Downtown ($105,000), the fifty-two
20A-2
BID 2008 Annual Report
April 7, 2008
Page 3
percent allocation ($137,500), and the Capital Outlay expense ($352,500).
Programs and activities for the fifty-two percent market sector will be
developed and implemented by stakeholder committees/task forces/work
groups/action teams with coordination assistance provided by Downtown
staff. Under an agreement between the City and the Downtown Santa Ana
Business Council, the forty-eight percent share of the 2007 assessments
will be disbursed to the DSABC to manage, as has been done the past few
years. This amount, calculated at $105,000, will be combined with their
prior year's surplus ($31,000), which has been retained by the DSABC,
giving them a total 2008 promotions and marketing budget of $136,000.
The 2008 annual report contains the basis and method of levying the
assessment, an estimated cost of providing the improvements and
activities and the amount of surplus revenue carried over (Exhibit 1).
For 2008, all funds are prior year surplus; therefore, no assessment
needs to be levied for this year. In order to comply with State law, the
City Council must approve the annual report and budget.
FISCAL IMPACT
Upon approval of the appropriation adjustment, funds will be available in
the Downtown Business Improvement District account (Fund No. 93) to set
up appropriations for the Downtown Santa Ana Business Improvement
District for 2008 and for marketing and promotions.
n~ cA.
tephen G. Harding
Deputy City Manager for
Development Services
Community Development Agency
APPROVED AS TO FUNDS AND ACCOUNTS:
~~~
Executive Director
Finance & Management Services Agency
SGH/NTE/mlr
040708 BID2008AnnualReport
20A-3
DOWNTOWN SANTA ANA BUSINESS IMPROVEMENT DISTRICT
2008 ANNUAL REPORT
Backaround
The Downtown Santa Ana Business Improvement District (BID) was established in
February 1984 by the City Council as a means of providing the Downtown business
community with funding for promoting the area, increasing security, enhancing
maintenance, and implementing physical improvements. The Community
Redevelopment and Housing Commission (CRHC) is the BID Advisory Board.
Improvement Area Boundaries
The geographic boundaries of the district remain unchanged from the original 1984
area, and they include over 700 retail, service, and professional members (Exhibit A)
Method and Basis of Levvina Assessments
Assessment Formula
The formula for the BID tax levy also remains unchanged from the original 1984
ordinance and is based on the category and/or sales volume of the business as
follows:
The following businesses located within the boundaries of the BID, classified under
City Ordinance NO 1690 as Amusement Services, Pawnbrokers, Service Station
and Classification A including, but not limited to, Retail Sale of Goods, Hotels and
Motels, Theaters and Food Establishments, shall pay an amount equal to one and
one-half times their annual business license fee.
Businesses classified as Commercial Rental Property, Rental Property, Residential
and Rooming House shall pay an amount equal to their annual business license fee.
All other businesses, including Professions, Trades, and Services within the
boundaries of the proposed Business District, shall pay an amount equal to their
annual business license fee.
Once the assessment formula is established, it cannot be changed without written
notice to all businesses within the boundaries of the proposed BID and a public
hearing held by the City.
2008 Assessment Levy
Due to the carryover of unprogrammed funds from 2007, there will be no
assessment levied or collected in 2008. Exh i bi"t 1
20A-4
Summary of Activities and Improvements
All programs and activities for the year 2008 can be classified in the following broad
categories:
Events and Promotions
o Holiday celebrations
o Merchant promotions
o Social celebrations
o Seasonal events
o Arts and music
Publicity, Advertising, Marketing, and Outreach
o Newsletters
o Website
o Visitor guides/maps
o General advertising
Physical Amenities
o Street and skyline banners
o Holiday decorations
o Kiosks and signage
Economic Development
o Business assistance
Capital Improvements
2008 Budaet Plan
In addition to the annual business improvement programs and activities, the BID has
supported a multiyear commitment to making essential capital improvements in
Downtown.
The 2006 Capital Improvement Fund will carry forward $352,500 which is dedicated to
Phase II of the Downtown streetscape Project and special projects. The Phase II
Streetscape Project commenced in January 2008. The City/Agency has dedicated
slightly under $2.4 million toward the completion of the project.
Working together, Downtown staff and stakeholders developed the 2008 Budget.
20A-5
2008 Budget Summary
REVENUE
Prior year operating surplus
(includes cash on hand and 2007 assessments
retained by DBC - $31,000)
Capital outlay carryover
4th Street improvement - $300,000
Special projects - $52,500
TOTAL REVENUE
EXPENDITURES
Overall Downtown benefit and support
Hispanic market sector
Downtown Business Council/Artists Village
Operating Expense Subtotal
Capital outlay
$105,000
137,500
136,000
TOTAL EXPENDITURES
20A-6
$378,500
352,500
$731,000
378,500
352,500
$731,000
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20A-8
AGREEMENT BETWEEN THE CITY OF SANTA ANA AND
DOWNTOWN SANTA ANA BUSINESS COUNCIL TO PROMOTE AND MARKET
DOWNTOWN SANTA ANA
This Agreement made and entered into this ih day of April, 2008, by and between the City
of Santa Ana, a charter city and municipal corporation of the State of California ("City") and
Downtown Santa Ana Business Council, a California corporation ("DSABC").
W!IN~SS~IH
Recitals:
1. Pursuant to California Business Improvement District (BID) law (Streets and
Highways Code section 36000 et. al.) as implemented by Ordinance NS-1715, and
related resolutions and budgets adopted thereto, the City annually receives and
disburses BID funds,
2. The approved 2008 annual BID budget allocates funds for promotions and
marketing in the Downtown Santa Ana BID area in addition to other expenditures
for the benefit of the assessment area.
3. A number of businesses in the BID area have formed DSABC in part to better
represent the interest of the downtown. This non-profit corporation has expressed
interest in participating in the marketing and promoting downtown Santa Ana.
5. DSABC represents that it is qualified and willing to operate a downtown Santa Ana
marketing and promotional program, DSABC certifies that the activities carried out
with funds provided under this Agreement will meet one or more of the BID
activities as set forth in Ordinance NS-1715.
WHEREFORE, for and in consideration of the respective and mutual covenants hereinafter
contained and made, and subject to all the terms and conditions hereof, the parties hereby agree as
follows:
I. CITY'S OBLIGATIONS
Upon this Agreement becoming effective, City shall provide $136,000 to DSABC from
funds allocated in the 2008 BID Annual Report, to be used for marketing and promotional
programs ("the Funds"), $31,000 of the Funds shall be monies transferred to DSABC in
2006 but unexpended.
1
20A-9
II. DSABC'S OBLIGATIONS
A. DSABC agrees to use the Funds to operate a promotional program, as set forth in
"Exhibit A attached hereto and incorporated herein by this reference. The Executive
Director, in his/her sole discretion, may approve reallocation of funds among approved
categories so long the expenditures comply with the 2008 Annual Report.
B. The Funds, and any interest earned by DSABC on the Funds, shall be separately
accounted for apart from any other funds of DSABC, or of any principal or member of
DSABC. DSABC shall, on July 1, 2008 and January 1, 2009 provide City with an
accounting of the use of the Funds that shall, at a minimum, incorporate copies of all
invoices, canceled checks, chart of accounts and bank statements detailing how the Funds
have been used and maintained by DSABC. These dates may be modified in the sole
discretion of the Executive Director of the Community Development Agency. DSABC
agrees that, at the Executive Director's sole discretion, City may require an audit of
DSABC conducted by a City designated accountant. DSABC shall keep records of all
funds received from City under the terms and conditions of this Agreement. City and/or
their representatives shall have access for purposes of monitoring, auditing, and examining
DSABC's activities and performance, to books, documents and papers, and the right to
examine records of DSABC's subcontractors, bookkeepers and accountants, employees and
participants in regard to said promotions program,
C. DSABC acknowledges and warrants that it shall at all times comply with the
laws, regulations and policies governing the use of BID funds, including but not limited
to, the limitations on use of BID funds set forth in California Streets and Highways Code
sections 36000 et. al. as well as the Downtown Santa Ana BID implementation
ordinance, reso1ution(s) and/or budget(s). DSABC agrees to and shall indemnify and
hold harmless the City, its officers, agents, employees from any violation of BID law that
occurs as result of failure to comply with the terms of this agreement or BID law,
D, DSABC agrees that the performance of obligations hereunder are rendered in its
capacity as an independent contractor and that it is in no way an agency of City.
E. DSABC agrees that if DSABC violates any of the terms and conditions of this
Agreement whereby BID funds were received by DSABC, or if DSABC reports
inaccurately, or if on audit there is a disallowance of certain expenditures, DSABC agrees to
remedy the acts or omissions causing the disallowance or repay City all amounts spent in
violation thereof.
F. DSABC agrees to provide City, within sixty (60) days of the effective date of this
Agreement, with its current articles or incorporation and bylaws.
2
20A-1 0
III. TERM
This term of this agreement begin on the date set forth above and shall terminate on
December 31, 2008, unless extended by mutual written consent of the parties.
IV. NOTICES
Notices to the parties shall, unless otherwise requested in writing, be sent by U.S. Mail,
postage prepaid, and addressed as follows:
TO CITY:
Community Development Agency M-25
20 Civic Center Plaza
P.O. Box 1988
Santa Ana, California 92702-1988
Attn: Stephen G. Harding, Executive Director
TO DSABC:
Its agent for service of process, as specified by the California
Secretary of State
V. ASSIGNABILITY
DSABC shall not assign nor transfer any interest in this Agreement, whether by assignment
or novation, without the prior written consent of City,
VI. HOLD HARMLESS
DSABC shall indemnify and save harmless City, its officers, employees, agents,
representatives and volunteers from and against any and all damages to or for loss of use of
property and for injuries to or death of any person or persons, including property and
employees or agents of City, and shall defend, indemnify and save harmless City, its
officers, employees, agents, representatives and volunteers from and against any and all
claims, demands, suits, actions or proceedings of any kind or nature, including, but not by
way of limitation, workers compensation claims and including attorney fees and reasonable
expenses for litigation or settlement, resulting from or arising out of the negligent or
wrongful acts, errors or omissions of DSABC, its officers, directors, employees, agents,
subcontractors and suppliers arising out ofDSABC's performance ofthis Agreement.
3
20A-11
VII. USE OF PRIOR FUNDS
DSABC shall have the right to continue to use unexpended BID funds from prior years that
it has not expended pursuant to the terms of such prior agreements with the City for the
purposes set forth in paragraph II of this Agreement.
VIII. CONTINUING OBLIGATIONS
DSABC's obligations and responsibilities set forth in this paragraph, and in paragraphs II
and IX(B) through (F) of this Agreement, shall not be affected by the termination of this
Agreement and shall survive the date of termination of this Agreement for such period of
time as City deems necessary for the responsibilities, duties and obligations to be performed
and completed to the satisfaction of City.
IX. TERMINATION
A. This Agreement may be terminated on thirty (30) days' written notice by either
party. In the event of such termination, City shall be entitled to reimbursement for
all unexpended funds to the effective date oftermination.
B. This Agreement may be suspended or terminated by City upon five (5) days' written
notice for violation by DSABC of the terms and conditions of the this agreement or
applicable City or State requirements. In the event of such suspension or
termination, City shall be entitled to reimbursement for all unexpended funds to the
effective date of suspension or termination.
X. EXCLUSIVITY AND AMENDMENT OF AGREEMENT
This Agreement supersedes any and all other agreements, either oral or in writing, between
the parties hereto with respect to the use of BID or Fiestas funds by DSABC and contains all
the covenants and agreements between the parties with respect to such employment in any
manner whatsoever. Each party to this Agreement acknowledges that no representations,
inducements, promises or agreements, orally or otherwise, have been made by any party, or
anyone acting on behalf of any party, which are not embodied herein, and that no other
agreement or amendment hereto shall be effective unless executed in writing and signed by
both City and DSABC.
XI. VALIDITY
The invalidity in whole or in part of any provision of this Agreement shall not void or affect
the validity of any other provision of this Agreement.
4
20A-12
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and year first
above written.
ATTEST:
CITY OF SANTA ANA
PATRICIA E. HEALY
Clerk of the Council
DAVID N. REAM
City Manager
APPROVED AS TO FORM:
JOSEPH W. FLETCHER
City Attorney
DOWNTOWN SANTA ANA BUSINESS
COUNCIL.
DELILAH SNELL
President
Employer ID #
5
20A-13
Exhibit "A"
SADBC Cost
Events $38,000
Eco- fabulous
Jazz/arts caravan
Taste ofDT/Jazz festival
1 st Saturday
Advertising and Promotions
TV program $44,000
Website
Mixers
Maps/visitor guides
General advertising
Banners, signage & decorations $15,000
Administration and Business assistance $20,000
Contingencies-To be allocated among $19,000
approved categories of expenditure
Total $136,000
6
20A-14